30 slides from Intelligent Protection Management's investor presentation, Oct 29, 2015
Slide 1: Snap Interactive, Inc. Investor Presentation October 2015
Snap Interactive, Inc. (OTCQB: STVI) Investor Presentation October 2015
Slide 2: Safe Harbor
Safe Harbor 2 This presentation is for discussion purposes only. The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Certain statements in this presentation constitute “forward - looking
Slide 3: About SNAP
About SNAP 3 Snap Interactive, Inc . (“SNAP”) develops, owns and operates dating applications on social networking websites and mobile platforms. Market: OTCQB Ticker: STVI Headquarters: New York, NY No. Full Time Employees: 26 Founded: July 19, 2005 Price (10/27/2015): $0.10 Avg. Vol (3m): 13,231 M
Slide 4: Investment Considerations
Investment Considerations 4 Middle Market Focus x Proven track record of efficient new u ser acquisition x Strong platform for roll - up acquisitions x Large database of 30MM users x Favorable trends positioning industry for explosive growth x Highly scalable business infrastructure
Slide 5: The Interactive Dating Industry Is Large and Growing
U.S. Adult Population Have used interactive dating The Interactive Dating Industry Is… Large and Growing 5 Sources: (1) http://www.ibisworld.com/industry/default.aspx?indid=1723 (2) Match Group, Inc. S - 1 dated October 16, 2015 (3) http://www.fastcompany.com/1812010/whos - telling - you - truth - a
Slide 6: The Interactive Dating Industry Is Comprised of Niches
The Interactive Dating Industry Is… Comprised of Niches 6 • Not a “winner - take - all” industry – Users commonly sign up for more that one competitive service – Dozens of niches differentiate based on demographic, affinity or type of relationship sought • As a result, the industry is uncommonly fra
Slide 7: The Interactive Dating Industry Is Dynamic and Disruptable
The Interactive Dating Industry Is… Dynamic and Disruptable 7 Mobile Dominance over Desktop 7 Tinder’s addictive g ame - like e xperience h as d warfed a pp u sage of industry l eaders Mobile Dating Apps: US Market Share By Session 1 1 • Mobile technology and shifting consumer habits have disrupted
Slide 8: Company SNAPshot
Company SNAPshot 8 SNAP’s 30 million user database forms the nucleus of an emerging portfolio of dating apps
Slide 9: AYI / Are You Interested?
9 AYI is a general - interest dating site with desktop and mobile destination websites, as well as iPhone , Android and Facebook applications. • Presently the source of all Snap revenue • Available on five desktop and mobile platforms • 97,500 active subscribers as of August 1, 2015 • Monthly subscr
Slide 10: AYI's Platform Is Scalable and Can Be Replicated for New Apps
10 AYI’s Platform Is Scalable and Can Be Replicated for New Apps • In AYI, SNAP has a mature, scalable infrastructure that is common to nearly all dating services – Direct marketing platform – Analytics – Billing infrastructure – Customer service – Fraud prevention – Email / notification platform •
Slide 11: The Grade
The Grade 11 The Grade is a mobile dating app exclusively focused on creating a high - quality user experience and curbing the behaviors that make dating unfriendly to women. • Launched November 2014 • A proprietary algorithm grades users in three categories: profile quality, message quality, and pe
Slide 12: The Grade Is Resonating With Daters
12 Described as “Awesome For Women,” and “The Answer to My Prayers,” The Grade has appeared in leading business and lifestyle publications. The Grade Is Resonating With Daters
Slide 13: SNAP Growth Strategy: The Grade
SNAP Growth Strategy 13 The Grade: • Grow on a lean budget principally through PR and word of mouth • Aiming to achieve ubiquity in the media based on a provocative and innovative concept • Focusing on core New York market, then expand marketing focus to other cities • No revenue model until scale i
Slide 14: SNAP Growth Strategy: Proposed AYI Rebrand
SNAP Growth Strategy 14 Proposed AYI Rebrand: • Relaunch AYI with a new, refreshed brand identity • Accompany relaunch with user interface upgrades • Aggressive win - back strategy to reactivate dormant users • Anticipate increase in new user acquisition efficiency with the new identity • Expected l
Slide 15: SNAP Growth Strategy: Proposed New Product Introduction
SNAP Growth Strategy 15 Proposed New Product Introduction: • Replicate AYI application with new brand, target audience and feature set • Deploy new product on all five mobile and desktop platform at launch • Operate new app in parallel to the relaunched AYI, leveraging the user database • New produc
Slide 16: SNAP Growth Strategy: International
SNAP Growth Strategy 16 Cultivate and expand the portfolio, building on the user database International: • Presently adapting AYI platform to accommodate foreign languages • Expecting to launch all AYI mobile platforms in Spanish by Q1 2016 • Considering Portuguese language translation in 2016 • Con
Slide 17: SNAP Growth Strategy: Mobile Emphasis
SNAP Growth Strategy 17 Cultivate and expand the portfolio, building on the user database Mobile Emphasis: • Presently retooling AYI mobile apps with the goal of cutting nearly 50% of required development resource requirements • New streamlined codebase intended to permit a mobile - first approach t
Slide 18: SNAP Growth Strategy: Acquisitions
SNAP Growth Strategy 18 Cultivate and expand the portfolio, building on the user database Acquisitions: • As SNAP realizes additional enterprise value, equity currency may become compelling to roll - up smaller competitors • SNAP infrastructure could support additional products, cutting much of the
Slide 19: Future Product Portfolio Composition
Future Product Portfolio Composition 19 General Interest Mobile / Millennials Seniors Ethnic / Religious Long - term Commitment International Match.com Tinder OurTime BlackPeopleMeet Chemistry Meetic , ParParfeito AYI ( AreYou Interested) The Grade [Expansion opportunity] [Expansion opportunity] [Ex
Slide 20: SNAP Corporate Evolution
Management is seeking to support the Company’s goals by bolstering the executive team and governance, increasing funding and liquidity by listing on a national securities exchange, and pursuing M&A targets SNAP Corporate Evolution 20 Today 3 Months 6 Months 12 Months 2 Years & Beyond • CEO change •
Slide 21: Management
21 Alex Harrington CEO Clifford Lerner Co - Founder, Chairman • Served as CEO of mobile dating pioneer MeetMoi , which was sold to Match.com • Also served as SVP of Strategy and Operations for Zagat Survey, where he oversaw a transformation of digital business • Holds an MBA from Wharton • Started S
Slide 22: Financial Considerations
FINANCIAL CONSIDERATIONS 22
Slide 23: Economic/Financial Model
23 Economic/Financial Model Subscription Advertising • Derived from AYI at present • Recurring revenue stream is predictable • Lead generation to other dating networks • Ad networks Short - Term Business Objectives Revenue Sources Reserve Cash for Product Launches – Reduce AYI Marketing Investment R
Slide 24: SNAP Marketing Efficiency Rivals Industry Leaders
24 SNAP Marketing Efficiency Rivals Industry Leaders ($ in MMs, 2014/2013 annual d ata) SNAP The Match Group Spark Networks Zoosk Q1 - Q2 2015 2014 2013 Q1 - Q2 2015 (1) 2014 2013 Q1 - Q2 2015 2014 2013 2013 2 Revenue $6.4 $13.6 $12.6 $433 $888 $803 $11.4 $61.6 $69.4 $178 Advertising and Marketing E
Slide 25: Financial Overview
25 Financial Overview 25 • Variability primarily due to advertising revenue • Subscription revenue in Q2 2015 was negatively impacted by : • Higher refunds and chargebacks • Unfavorable foreign exchange rates Revenue • Achieved objective of positive cash flow from operating activities in Q3/Q4 of 20
Slide 26: Selected Income Statement Highlights
Selected Income Statement Highlights 26 CURRENT QUARTER PRIOR YEAR PRIOR QUARTER FAVORABLE (UNFAVORABLE) PRIOR YEAR % to PY PRIOR QUARTER % to PRIOR QUARTER Q2 2015 Q2 2014 Q1 2015 Revenue Subscription revenue $ 3,076 $ 3,151 $ 3,129 $ (75) - 2.5% $ (53) - 1.7% Advertising revenue 113 299 57 (186) -
Slide 27: Selected Balance Sheet Highlights
Selected Balance Sheet Highlights 27 (1) Diluted shares outstanding as of June 30, 2015 June 30, 2015 (millions) Cash and cash equivalents $ 1.9 Other current assets $ 0.6 Total current assets $ 2.5 PP&E, net $ 0.4 Other long term assets $ 0.6 Total Assets $ 3.6 Deferred revenue $ 1.8 Other current
Slide 28: Mobile Dating Is Commanding High Valuations
Mobile Dating Is Commanding High Valuations 28 Mobile Dating Company Year Founded User Count Approximate Funding ($MM) Estimated Valuation ($MM) Hinge 2011 n/a $21 $70 Coffee Meets Bagel 2012 100k - 500k 2 $11 >$30 2 Happn 2013 6 Million $22 n/a The League 2014 n/a $2 n/a Bumble 2014 n/a n/a n/a • A
Slide 29: Industry Comps
Industry Comps 29 • There are few true dating comps with a subscription model; Spark Networks is the closest public comp today • Match Group’s IPO will draw a lot of attention to the industry • Prevailing industry revenue multiples are 3 - 5 times SNAP’s revenue multiple • Peer companies trade at mo
Slide 30: Non-GAAP Reconciliation
Non - GAAP Reconciliation 30 Q2 2014 Q1 2015 Q2 2015 Reconciliation to Adjusted EBITDA Net loss $ (259.7) $ (1,219.2) $ (259.0) Interest expense (income), net 5.6 236.4 430.6 Depreciation and amortization expense 43.6 60.8 35.2 Loss on disposal of fixed assets - 79.6 - Stock - based compensation exp